2020 was a tough year for the UAE’s housing market, surrounded by a massive supply glut. According to Global Property Guide, the prices for Dubai’s residential property fell by 4.88% during the third quarter of 2020. This was followed by a year-on-year (YoY) decline of 3.27% in Q2 2020, 5.06% in Q1 2020, 4.05% in Q4 2019, and 4.52% in Q3 2019. During Q4, house prices in Dubai fell by 1.36%.
The foremost reasons for this decline in property prices are – excessive supply aggravated by low demand due to the COVID-19, an increase in property registration fees from 2% to 4%, implementation of 5% Value-added tax (VAT) to home sales after three years of the completion of the project, oil price slump, and the after-effects of Federal Mortgage Cap, introduced in 2013.
As the countdown for Expo 2020 Dubai begins, the real estate sector has a chance to come out of the rough phase and make the most of this opportunity. Industry experts believe that Expo 2020 will defy all odds for the real-estate sector and will boost property sales, stimulate the job market, and will ensure that the sector thrives despite market fluctuations.
Expo 2020 to Act as a Panacea for the Real-estate Sector:
There are a lot of expectations of the real estate industry from the EXPO 2020 due to a list of favorable policy reforms and schemes launched by the UAE government such as: the Golden card visa, 100% foreign ownership for enterprises, easy payment plans, long-term residency options for professionals, and the flexibility offered by financial institutions in debt repayment, and foreign retirees scheme.
The Impact of EXPO 2020 on Dubai Property Market:
Real estate gurus predict that Expo 2020 Dubai will expedite the pace of growth of the UAE real estate market. The event will have a favorable impact on the competitiveness of the real estate market, infrastructure, economy, trade flow, which will spur the sales of the real-estate sector. These schemes will boost investor confidence and foster more investment into the UAE real estate market.
Expo 2020 will bring transformational change to Dubai’s property market in terms of both sales & value. Since the announcement of Expo 2020 in Dubai, there has been a colossal increase in sales of hotel rooms as 25 million expected visitors will rush to book their accommodation well in advance. Expo 2020 will also flourish the sales of residential property as thousands of expatriates will move to Dubai before, during, and after the event. The grand event will also have a favorable impact on the commercial real-estate sector with increased demand for office space as experts predict that post expo, an exhaustive list of global logistics & marketing firms will relocate or expand in Dubai to service-related event driven demand.
The real-estate sector will also have a profound impact on supportive government policies such as – easing of ownership and visa regulations, over recent months. This will work wonders for the real estate industry and create even more favorable conditions for real estate growth. The grand event will have a favorable impact on the prices and will attract more investment in the near future.
There were several large-scale real estate and retail projects announced in the run-up to Dubai Expo 2020 that form a part of the wider expo experience to be provided by Dubai. The most significant real estate and retail developments among those are Mohammed Bin Rashid City and Dubai South.
A list of new infrastructure projects worth billions of dirhams has been announced which will have a major impact on Dubai South. Several experts believe that post Expo, Dubai South will emerge as a microcosm of unconventional real estate and architecture. The expo site at Dubai South is spread across 4.38 Sq. km. It is equipped with world-class infrastructure and imposing structures and has hosted several high-profile events in the past. Dubai South has close proximity to Al Maktoum International Airport and is easily connected with every part of Dubai through a new metro line, Route 2020.
They are as follows:
- Over 8,200 property units have been sanctioned for development in Dubai South after Expo 2020. This includes – schools and malls, within a 700,000 sq. ft. area(2).
- A list of commercial development projects has also been planned for Dubai South and an area of 1.5 million sq. ft has been allocated to it.
- Dubai South will be benefited from sustainable practices as the government will power the event through a solar project and will reuse and repurpose 90% of the construction materials used after the event. Several companies based in Dubai South in the renewable energy business will be benefited from it.
- Expo 2020 will initiate redevelopment work at District 2020 – an area located in Dubai South where the expo will take place. Some of the buildings such as -the Sustainability Pavilion, for instance, will live on as a center for child and scientific education. The Dubai World Trade Center Conference and Exhibition Center will also remain after the expo.
- District 2020 will have 700,000 sq. ft. of residential space, education facilities, and parkland equivalent to six soccer pitches.
- With proximity to Al Maktoum International Airport, District 2020 will act as Free Trade Zone (FTZ) and will facilitate the businesses to function tax-exempt.
- The Expo site at Dubai South will go through a transformation phase with 8,228 units currently under construction. This will lead to the establishment of several new homes, schools and shopping centres.
- The AED 10 billion investment in building metro lines in Dubai South will have benefits far beyond Expo for Dubai residents as well as for the global expats working or visiting the city.
- Billions of dollars will be invested into Dubai’s infrastructure to improve its global image as well as its rankings in business competitiveness. It will also attract thousands of talented expats to the city who will buy or rent property, which will spur the sales of the real-estate sector.
UAE launched its ambitious Urban Master Plan – Dubai 2040 on Saturday, March 13, 2021. The plan outlines Dubai’s strategy for sustainable urban development to cater to the requirements of the rising population of the emirates. The top agenda of Dubai 2040 is to improve the effectiveness of resource utilization, develop vibrant, healthy, and inclusive communities, and double green and leisure areas and public parks to create a healthy environment for the residents and visitors.
The Need for Dubai 2040:
As per govt. data, UAE’s population is expected to increase by 76% in the next two decades (i.e from 3.3 million in 2020 to 5.8 million by 2040). The commuter-adjusted or day-time population will also increase from 4.5 million in 2020 to 7.8 million in 2040. Dubai 2040 focuses on building infrastructure as per the needs of the rising population and ensuring Dubai maintains its spot among the best cities to live in.
Dubai 2040 envisions the establishment of a list of green corridors to connect the service areas, residential areas, and workplaces, ease the movement of pedestrians, bicycles, and sustainable mobility throughout the city. The plan revolves around optimum utilization of space available in Dubai and the development of infrastructure to support residents and foster a more favorable business climate.
Dubai 2040 – A Forge Ahead for the Real Estate Sector:
The real-estate sector will be the biggest beneficiary of Dubai 2040 as construction work will take place on a very large scale. The ambitious program will lead to the expansion of urban areas by increasing the space for health & education institutes by 25% as well as an increase in the areas used for economic, commercial, and industrial activities to 168 sq. km. To accomplish these tasks there will be a vast requirement of real-estate firms. Dubai 2040 is a billion-dollar opportunity waiting to be cashed in for the real-estate sector.
Here are some of the highlights of Dubai 2040 :
- Increase in the land area used for hotels and tourist activities by 134%
- Increase in the length of public beaches by 400%
- 60% of Dubai to comprise of nature reserves and natural areas
- 55% of Dubai’s population to live within 800 metres of a main public transport station
- Billions of dollars will be invested in infrastructure to make Dubai a global hub for innovative start-ups, and international corporations
- Focus on improving the efficiency of resources, fostering a vibrant & inclusive environment
- Doubling the size of green cover and leisure areas to offer a healthy environment to the residents
- Developing comprehensive legislation and planning governance model
Dubai Urban Master Plan:
Dubai South will also be the biggest beneficiary of Dubai Urban Master Plan which is focused on development and investment in five main urban centres (three existing and two new centres) that foster the growth of economic sectors, create employment, and improve lifestyle.
The existing urban centres include Deira, Bur Dubai,Downtown and Business Bay; Dubai Marina and JBR .
Dubai 2040: What’s there for the Property & Strata Management Sector?
Dubai 2040 will also be a boost for property & strata management firms such as Kaizen AMS as real-estate firms will be requiring support in terms of design & construction, strategy, handover process, and tenant management or retention etc.
KAIZEN AMS – ISO 9001:2015 certified top property management firm in Dubai, offers end-to-end solutions in Property Management, Owner Affairs, Unit Management, Handover Services, Community Management, Lease Management, and Investment Advisory. KAIZEN AMS has across 12,000+ units and is also a proud corporate member of the U.S. Green Building Council.